Indiana State of the State Address 2002
By Stateline Staff
Good evening, fellow Hoosiers, colleagues and friends. Speaker Gregg, Senator Garton, Senator Young, Representative Bosma, Chief Justice Shepard and Chief Judge Brook, thank you for hosting this joint session.
I want to thank my wife, Judy, for all she does for Indiana. And my partner Joe Kernan a good friend and a great lieutenant governor.
Before we get to the business at hand, we should pause to remember that our world has changed. Our country is at war. Six hundred men and women of the Indiana National Guard are on active duty in 14 countries around the world. Our armed forces are on the front lines. And we were all engaged in the fight against terrorism, wherever it lives.
In September, terrorism took Hoosier lives in New York and Washington. Last week, we lost another of our own when Gary native U.S. Marine Sergeant Jeanette Winters was killed in action. Please join me in honoring the heroes who have given their all in the fight for freedom as well as those who fight today. Please stand for a moment of silence. Thank you.
One of our greatest American leaders Martin Luther King Jr. was born on this date 73 years ago. It is appropriate that we talk tonight about the challenges affecting the state of our state on his birthday because Dr. King reminded us about the power each of us has individually and how that power grows when we work together. He reminded us about the importance of having the courage and the vision to do the hard things today in order to have a better tomorrow. Dr. King's ideals apply today because our future seems unsettled.
Our sense of security was shaken on Sept. 11. But we can help Hoosiers feel safe and secure again by giving our public safety officers the tools they need to prevent and respond to terrorism here at home, as recommended by the Counter-Terrorism and Security Council.
Our economic security has been threatened as well by the national recession. Two weeks ago, Indiana's unemployment insurance claims were the highest they have been since 1984. But if we work together to resolve the budget and tax-structure challenges our state is facing, we can grow jobs and we can improve the economic security of all Hoosiers.
Over the past year, we've seen Hoosiers work together to accomplish great things in the face of huge challenges. After the terrorist attacks, some Hoosiers went to work at Ground Zero. Some helped recover bodies. Others made sure that the workplace was safe for the recovery workers. As that work was going on in New York, some misguided people lashed out at innocent citizens of Middle Eastern heritage. A Hoosier was among those who spoke up to help heal an angry nation. Dr. Sayyid Syeed of the Islamic Society and 200 other leaders Christians, Muslims and Jews denounced the attacks. They called on Americans to "make the right choices in this crisis to pray, act and unite against the bitter fruits of division, hatred and violence."
Hoosiers worked together in 2001 on other causes, too. In Porter County, for instance, the founders of Hilltop Neighborhood House saw that despite all they had done for their community since 1996 more help was needed. So they partnered with the state of Indiana and expanded their part-time health care program into a full-fledged clinic that provides medical and dental care to thousands of low-income residents.
None of these people were forced to help anyone. They simply saw a need and worked together to meet it.
Let me introduce representatives of those who volunteered at Ground Zero: Lt. Mark Rapp from Marion County's Task Force One. Steve Creech from the Department of Natural Resources' fire-fighting team. And Tim Crouse from the Department of Labor's workplace safety team. Also with us is Dr. Syeed from the Islamic Society. Cher-ree Isakson from Hilltop House. Let's thank them for their leadership. Would you all please stand?
These Hoosiers understand how important working together is to the success of any mission. As their leaders, we can do no less. Our mission this session is to do the things that must be done if we are to build a better Indiana for all of our citizens. We can do that by enacting the Balanced Budget Plan and the 21st Century Tax Plan. These plans resolve the challenges that are before us today. They enable us to complete our mission for a better Indiana.
If we do not pass the plans contained in House bills 1003 and 1004, we will turn back the progress we have made in improving our schools, in growing good jobs and in helping our senior citizens. Let's talk about that progress and how we have come together in the past to strengthen Indiana.
Just four years ago, our eighth graders ranked seventeenth in a national comparison of math skills. But since we worked together to improve our schools, our eighth graders have jumped to fourth highest in the country in math. Our fourth graders are second highest. Indiana now ranks in the top 10 in the nation in math improvement, teacher quality, school accountability and parental involvement in schools. Our standards for math, language arts, science and social studies are among the highest in the nation.
While we talk about progress, too many of our students still struggle. We must find a way this session to balance our budget so we can continue our focus on helping every child succeed. The future of all of our children is in jeopardy if we do not act this session. We cannot slow down. We cannot stop. We cannot wait.
Not too long ago, the exciting jobs of the future were found only in places like Silicon Valley. But many of those jobs have moved here because of Hoosier intellect, innovation and investment. Researchers at Purdue and Indiana universities are building instruments smaller than the head of pin that will allow incredible medical and communications breakthroughs and they are unwrapping the secrets of human DNA, paving the way for huge advances in medical science. And with state support, private researchers throughout Indiana are doing other groundbreaking work.
IU's new School of Informatics is training students for careers in what used to be the jobs of tomorrow jobs that now are a critical and rapidly growing component of Indiana's economy today. We cannot slow down. We cannot stop. We cannot wait to protect and improve the environment that encouraged this growth or that progress will be undone.
A big part of actually moving ahead involves dreaming of and planning for a better future. Some Hoosiers might want to pursue a higher education but are not ready for a four-year program. In recent years, those Hoosiers would have passed their dreams on to their children. But we believe that every Hoosier deserves to do more than dream. So we joined together legislators, educators and administrators to open the Community College of Indiana. We made college accessible and affordable. We have had record enrollment in Community College, and the need for this new partnership between Ivy Tech College and Vincennes University is even greater now that we are in recession. We cannot slow down. We cannot stop. We cannot wait to make education available for all working families.
The cost of prescription drugs has been skyrocketing in recent years, making some of our needy senior citizens choose between buying groceries or getting the medicine they need. Last year, we found a way to help 14,000 of those seniors through our Hoosier Rx program. To continue to help our senior citizens get the prescription medicine they need, we cannot slow down. We cannot stop. We cannot wait.
Some of you may be wondering how Indiana has a deficit when we had a $2 billion surplus just three years ago. Let me tell you. Back in 1999 a lot of people in this chamber including me thought we had too much taxpayer money on hand. So we did two things: We invested in Indiana and we cut taxes. Together, we invested $800 million of the surplus on projects throughout our state: $200 went to improve our roads in Merrillville and Madison, in Bedford and Bloomington, and every county, city and town in between; $160 million went to build computer networks and renovate buildings at state universities; $150 million went to state parks and state hospitals; and $290 million went to our teachers' pensions.
These were good investments in Indiana. And they were the right thing to do.
On top of that investment we used the surplus to cut taxes by more than a billion dollars for homeowners, farmers, business, the elderly and the poor. We planned to reduce the surplus from $2 billion to $1.2 billion a good safety net for a $10 billion budget. But instead of seeing the state's revenue continue to grow as we all expected, the national recession caused that revenue to decline at the same time the investments and tax cuts took effect The recession will deprive Indiana of more than $3 billion in projected revenue that we depended on when we developed the budget. Revenue that made those tax cuts and those investments affordable.
So I took action. I had already eliminated 700 positions from the state's payroll. But when our revenues started to decline, I froze hiring. I froze wages. I stopped some investments we had planned to make. And I looked for ways to do more My Balanced Budget Plan makes more than $700 million in painful cuts from the state's budget over the next 18 months. It calls for dramatic changes to Medicaid and it limits some important services that people need and have come to count on.
But we cannot cut enough to make up that projected $3 billion revenue loss without jeopardizing the state's biggest expense our public schools and our universities, which represent 55 percent of our budget. Fifty-five percent. And, despite what some have said, there is no realistic way to grow out of the crisis either. To make up for what the recession has cost Indiana, we would have to experience state revenue growth of 15 percent this year. At our peak growth, we never hit 10 percent. Our latest revenue forecast predicts we will have no revenue growth this fiscal year, and we will grow by only 2.7 percent next fiscal year.
Like almost every other state, we are in recession.
My Balanced Budget Plan does everything possible to avoid a general tax increase and still protect our progress in Indiana schools. Some oppose my plan to balance the budget because it calls for increases in the cigarette tax and in riverboat taxes. In a choice between those taxes and our schools, I will pick Indiana's children every time. Some think that all we have to do is keep hacking away at the budget, run our balances to zero, wait for the economy to pick up, and we'll be okay. But there is no magic wand to make the economy grow enough to recoup the dollars lost to the recession.
We simply have no choice but to address our deficit and balance our budget. Now. Hoosier children, Hoosier families need us to act. Waiting will mean the deficit despite the budget cuts we are making will continue to grow. And using delaying tactics to get us through this year will put off the debt that is piling up and will put the education of our children at greater and greater risk.
The other challenge we have before us this session is court-mandated reassessment and the need for tax restructuring. Our 21st Century Tax Plan protects homeowners from double- or triple-digit property tax increases caused by the Indiana Tax Court. Our plan cuts the total collection of property taxes by 20 percent and increases sales and income taxes to pay for that property tax cut. It moves Indiana away from an unfair, regressive property tax and toward a more fair system of taxation.
We must take action now because local governments and schools will set their budgets later this year and Hoosiers will receive new property tax bills based on those budgets before lawmakers can act next year.
We all know that Indiana's entire tax structure must be updated to keep Indiana competitive for new business and new jobs. Our plan enables Indiana to progress from an Industrial Age tax structure to as it is appropriately named the 21st Century Without it Indiana is at a competitive disadvantage in these rapidly changing times. Without it, homeowners will see dramatic increases in their property taxes and people will get hurt particularly seniors and others on fixed incomes.
You know, progress would be easy if our economy had continued to grow as we had expected. But it did not grow. We were not elected to lead only during easy times. Lieutenant Governor Kernan and I worked with some of the most talented financial experts in Indiana Democrats and Republicans to develop comprehensive ways to solve the budget and restructuring challenges and to set the course for Indiana to progress for decades to come. We made those plans available in October and November so everyone would be prepared to hit the ground running this session. While we have not seen any other detailed proposal to address either our deficit or our restructuring needs, we are willing to modify these plans if we see a better way to reach our goals, which are protecting our schools by balancing the budget. Protecting homeowners by cutting property taxes. Providing economic growth by restructuring taxes.
We have been talking for a while now about numbers and facts that make passing the budget plan and the tax plan the right thing to do. Let's talk a little bit about why. It is the right thing to do because those numbers and those facts add up to an Indiana where our children can learn and can grow and can be our new generation of community leaders. Take a look at any child you see in Indiana and you will see the great promise they all have to offer. Take a look at what Karen Kinney's kindergarten class at Bibich Elementary School in Dyer had to say in a book they wrote and illustrated last year. It's entitled "How to make Schools Better." In it, Brittany suggests: "Work hard to get more money for the schools." Alex says, "Help people who want to be teachers." Dominic wants to "Make the fire truck on the playground into a tunnel slide." I don't know if we can help Dominic get his tunnel slide, but we can help Brittany and Alex and every other child in Indiana by protecting the progress we have made in making their classrooms better.
In the past five years, we have worked together to make Indiana better, to make Indiana that place where promise can be realized. As a result, our schools are getting better and safer. We rank eighth in the nation in the growth of high-wage jobs, eleventh in the number of high-tech jobs. Our roads and public facilities are better. Children of the working poor have health insurance. Our environment is cleaner. We put more police officers across Indiana to keep our citizens safe. And we are helping more and more of our elderly and disabled Hoosiers live at home near family and loved ones. We must act now to protect those investments.
As we take up the challenges before us in the weeks ahead, we should think about the remarkable people in Indiana who work every day to make their communities better. We should work together like they do. We should remember why we are here to make a positive difference in Indiana to make Indiana the place where our children can realize their potential, their promise.
I stand before you tonight with two solutions to Indiana's challenges one that addresses the budget deficit while protecting education and another that deals with the court-ordered reassessment by cutting property taxes to protect homeowners and providing for the economic future of our citizens.
I cannot get this job done without your help. It can be done. And I commit to you tonight that I will do everything I can to get it done. Because it must be done. And if we work together, it will be done for all Hoosier children and for all of Indiana.
Thank you and good night.